Berkshire Without Buffett

As of now, it hasn’t been announced who the new CEO of Berkshire will be, but Buffett has given us a few hints. It is going to find someone who already works at Berkshire, and he wants them to be (relatively) young.

While I understand that it might be a little scary to think about the day that Warren Buffett leave Berkshire Hathaway, considering both his fame and fortune, there definitely isn’t any reason to worry— and here’s why.

Hands Off Management

When Warren Buffett leaves Berkshire, all of the subsidiary are going to be pretty, well, unaffected. This is because one of Buffett’s biggest rules of investing is to focus on the business, and not who’s running it. Since he’s always invested with this thought process, Buffett has never been one to step in and make changes to his subsidiary’s.

For example, Buffett has said that a ham sandwich can run Coca-Cola and “your idiot nephew” could run just about any good business.

Safe Funds

The potential to profit has never been an issue for Berkshire Hathaway because of the approach that Buffett takes. Firstly, Berkshire has a lot of cash— or at least liquid assets. This is probably because Buffett thinks cash is like oxygen, “never thought about when it is present, the only thing in mind when it is absent.” Additionally, Berkshire has a huge variety of investments which were all hand picked by professionals. There is so much diversity in the Berkshire portfolio that even if the market was doing poorly, Berkshire would hold it’s upper hand.

To keep shareholders at ease until Buffett makes his decision for his successor public knowledge, he has said that his son Howard will be named non-executive chairman at Berkshire. This will help make the change to CEO easier, if there ever became a need.

Leave a Reply

Your email address will not be published. Required fields are marked *